Power Ministry warns discoms to pay bills on time, promises more funding

The central government intends to infuse liquidity into financially frail public power distribution companies (discoms), a press release from the Ministry of Power said. While these efforts are ongoing, discoms must pay their bills to power generators on time despite the ongoing covid-19 crisis and the national lockdown, the ministry clarified.

“Efforts are being made to infuse some liquidity in the power sector, the details of which would be shared with discoms shortly,” the press release said. “However, discoms may also raise funds, if required, to meet this crisis.” The obligation to pay for power within 45 days of the presentation of the bill or as provided in the PPA (power purchase agreement) remains unchanged, the release said.

In order to ensure continuous power supply through the pandemic, in March, the Ministry of Power said that generators should not stop supplying power to discoms despite their substantial outstanding dues. As of March, discoms owe over ₹88,000 crore to generators, according to data from the government’s Praapti portal. The ministry had directed the Central Electricity Regulatory Commission (CERC) to offer a moratorium of three months to discoms struggling to pay bills to generation and transmission companies and not levy penalties on late payments.

Public sector discoms in states including Andhra Pradesh and Madhya Pradesh invoked force majeure, citing the ministry’s directive, to keep their bills pending.

In its clarification on Monday, the ministry has now said discoms will have to meet their dues as per their original deadlines

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